Insurance For Farm Vehicles

Farm vehicles and trucks are crucial in helping keep livestock fed and fields harvested. However, if one of these vehicles is in an accident, the farmer has to pay to repair or replace the vehicle out-of-pocket. Farm truck insurance can help absorb these costs to allow farmers to continue their operations.

Some of the vehicles covered under this type of insurance are:

• Farm trucks
• Tractors
• Other farming vehicles

If you’re a farmer, there’s a good chance that you might not even know whether you need insurance for your farm vehicles.

Do Farm Trucks Need Insurance?

Maybe. Each state has its own requirements for farm truck insurance. Some states do not require insurance, but if you’re financing the purchase of the equipment, the loan terms may include requirements to have insurance.

How Much is Farm Truck Insurance?

Pricing farm truck insurance is difficult without knowing the exact coverage you have and the vehicles on the policy. For example, a standard policy may have multiple vehicles:

• ATVs
• Semi-trucks
• Trucks
• Tractors
• Trailers
• UTVs
• Other farm equipment

Most policies will offer the following coverage:

• Cargo. Depending on whether you’re hauling goods or using a farming dump truck, you may have the option of adding cargo insurance. This insurance protects against any damage or loss to the cargo you’re hauling.
  
• Collision. If a collision occurs, this coverage will pay to repair or replace the vehicle.
  
• Liability. Protects against personal liabilities for claims of property and bodily injury damages.
  
• Medical payments. Covers the medical bills in an accident.
  
• Uninsured/underinsured. Coverage in the event that the opposing driver’s vehicle is underinsured or uninsured.

These policies are very similar to your traditional auto policy. Depending on the insurance company, you can also have roadside assistance added to your policy, or it may be a freebie.

Cost Estimates

If you need to take out a policy, you can often bundle insurance options to save money. However, there will also be a lot of variables to include. A high-end tractor can cost over $100,000 and a used, compact tractor may cost just $10,000 – $15,000.

Insurance on these two farm vehicles is drastically different.

However, if you’re trying to insure a farm dump truck, you can expect to pay just $600 a year. Farm truck insurance is often much cheaper than normal insurance, and the reason for this is that you’re using the vehicle on your own property for the most part.

A general rule of thumb is that 50% or more of the vehicle’s use must be on a farm for it to be covered by farm truck insurance.

You can expect to pay in the following range for your insurance:

• $2,000 – $5,000 per year if the farm truck is used primarily for farm use
• $3,000 – $6,000 annually if the farm truck is used for personal purposes, too

However, you may spend $5,000 – $12,000 a year if you need to cover a tractor. Of course, this figure may be even lower, depending on:

• Cost of the tractor
• Policy deductible
• Other policies

Many farm vehicles have some coverage from an umbrella equipment policy or are part of your broader farmers insurance policy. Insurance is much lower if you have multiple policies that can help absorb some risks.

Smaller tractors generally cost less to insure.

It’s crucial to compare quotes and policies from multiple insurance companies to find the one that will offer you the best coverage for the best price.

If this is your first time taking out insurance for your farm or you already have insurance of some kind, contact an insurance agent to discuss your needs. Agents can help you determine the right level of coverage you need.

However, you also need to consider the type of insurance that you take out.

Types of Farm Truck Insurance

Farm trucks have multiple insurance types that they can fall under. You’ll need to decide the best option for your operations. The most common types of farm truck insurance policies include:

Commercial Auto

Depending on the vehicle, you may need a commercial auto insurance policy. Many farmers have their own semi-trucks to haul food to grocery stores or processing plants. You can also add other farm vehicles to this policy, such as pick-up trucks used for hauling feed or even towing tractors or other equipment.

Farm Auto

Some insurers offer farm auto policies, which are often more affordable than commercial auto policies. Stringent requirements exist for farm auto insurance, and they’re often an option for farm vehicles that do not:

• Qualify for commercial trucks
• Qualify for personal auto insurance

If the vehicle doesn’t meet the requirements for insurance on a commercial or auto policy but is used exclusively for farming operations, farm auto policies may be a smart option. Consider your options here and speak to an insurance agent to understand the best option for your operations.

Personal Auto

Small pickup trucks that the farmer uses in their operation and for personal use may be on a personal auto policy. These policies have lower limits, and they cannot be deducted from your taxes. However, they’re an easy policy to take out.

If you do choose this type of farm truck insurance, consider an umbrella policy.

Umbrella policies will add extra liability coverage to your vehicles so that you have lower risks of personal liability if you are involved in an accident.

Farmowner’s Policy

Depending on the state where the farm is located, it’s possible that the farm vehicles do not need to be registered. In this scenario, the vehicle often has limited use and doesn’t leave the farm.

Older vehicles or those with limited use may have their farm vehicles on their farmowner’s policy.

Farm truck insurance is one way to protect your farm from potential liabilities. If you don’t have insurance and there’s an accident with one of your pieces of equipment, you may have to pay tens of thousands of dollars or more to replace the vehicle.

The right insurance protects you from these debts and having to take out another loan to keep your business operational.